We are about to discover if there is any substance to the phrases “survive until ’25” or “don’t deep six until ’26”.

These phrases have been doing the rounds in property investment circles in 2024, in reference to a time in 2025 when expectations of falling interest rates would spark a bounce-back in real estate markets, lowering refinancing risks and driving a recovery in valuations. As we approach the New Year, then, can European real estate investors look ahead with confidence?

Let’s start with where we are now. Arguably, the most important driver of the macroeconomic backdrop over the past six to 12 months has been confirmation that inflation is falling, largely thanks to the weakening of the Chinese economy reducing inflation across western nations. Euro zone inflation recently fell to 1.7 percent, sinking below 2 percent for the first time in three years. This has given the ECB and other major central banks the confidence to start cutting interest